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Commission adopts new general block exemption regulation for state aid and new guidelines for state aid in the area of environmental protection and energy

In 2012, the Commission decided to reform and modernize its legislation in the area of state aid. Since then, the Commission has reformed its procedural regulation and adopted a number of new guidelines for various sectors.

New Environmental and Energy Guidelines

On 9 April 2014, the Commission adopted in principle new guidelines on aid to projects in the field of environmental protection and energy ("the Guidelines"). Formal adoption will follow. The Guidelines will support Member States in reaching the climate targets contained in the Europe 2020 strategy which focusses on creating the condition for smart, sustainable and inclusive growth in the internal market.

To that end, the Guidelines identify a number of environmental and energy measures for which aid under certain conditions may be compatible. These measures concern aid for, inter alia, environmental protection beyond EU standards, investment and operating aid for energy from renewable sources, environmental studies, resource efficiency and waste management, remediation of contaminated sites, and energy infrastructure.

The Guidelines set out the criteria that the Commission will use in its compatibility assessment. The Commission will consider a state aid measure compatible only if it satisfies each of the following criteria: (a) well-defined objective of common interest, (b) need for State intervention, (c) appropriateness, (d) incentive to behave differently, (e) proportionality, (f) avoidance of major negative effects and (g) transparency.

The Guidelines indicate how these criteria are to be interpreted for environmental and energy measures generally, before applying the criteria to several specific categories of environmental and energy aid.

Last, for several categories of aid, the Guidelines determine thresholds under which the proposed measure does not need to be notified.

New GBER

Last week, the Commission reached another milestone by adopting a revised General Block Exemption Regulation (GBER). The GBER allows Member States to implement certain state aid measures without having to notify these to the Commission for prior approval. Measures that fall outside of the scope of the GBER are not necessarily incompatible, but will have to be notified following to the normal procedures of the procedural regulation. The Commission intends to reduce the administrative burden for the Member States and itself while at the same time increasing legal certainty for state aid beneficiaries, by considerably extending the "safe haven". The main new elements are:

Increased thresholds: the thresholds for many measures that were already covered by the GBER have been raised;

Additional categories of aid: the new GBER allows exemptions for aid measures in more sectors, such as aid for local, broadband, research and energy infrastructures, innovation clusters, regional urban development funds, social aid for transport for residents of remote regions, culture and heritage conservation, audio-visual works, sports and recreational infrastructures and aid to make good damage caused by certain natural disasters;

Simplification: the conditions that aid measures should meet to benefit from the exemption have been significantly clarified and simplified.

The significant increase in exempted aid measures is balanced by several safeguards, such as improved transparency requirements (national public registers of individual aid awards), increased monitoring and continuous evaluation.